31st Jan 2006 10:10
Rio Tinto PLC31 January 2006 Rio Tinto's 75.7 per cent owned subsidiary, Coal & Allied Industries Limited,issued the following news release in Australia. All dollars are Australian currency. Coal & Allied record earnings and cashflow - 2005 full year results SUMMARY • Net profit after tax was $290.1 million compared with $116.6 million profit after tax in 2004 • Net debt in Australian dollar terms reduced by 73 per cent in 2005 to $69.2 million • A fully franked dividend of $1.20 per share will be paid on ordinary shares Commenting on the result, Coal & Allied's Managing Director, Dr Grant Thornesaid, "This financial result reflects a continuation of strong demand for coalin 2005. "Although a capacity balancing system remained in place at Port Waratah tomanage vessel queues liable to arise through constrained infrastructure, Coal &Allied managed to increase total sales by 1.3 per cent over 2004." "Overall shipments, and hence production, were aligned with port and railcapacity. New investments in rail and port infrastructure, announced in 2005,are expected to provide increasing capacity from mid-2006." With buoyant market conditions applying to all mineral and metal sectors, therewas unprecedented competition for business inputs - notably heavy mobileequipment, off road tyres, explosives, skilled labour, and maintenancematerials. Like all industry participants, Coal & Allied faced unremitting costpressures. Higher fuel prices alone increasedCoal & Allied's costs by $19 million over 2004. Coal & Allied's net profit was positively affected by higher export prices andbusiness improvement initiatives, offset by higher input costs (including fuel,tyres and explosives) and engagement of mining contractors. The net profitafter tax was $290.1 million. SUMMARY OF PERFORMANCE Coal & Allied's results for 2005 are shown below, along with AIFRS restatedcomparative results for 2004. Year to 31 December Change 2005 2004 % Sales revenue ($ millions) 1,442.0 1,058.2 +36%Net profit after tax ($ millions) 290.1 116.6 +149%Operating cash flow ($ millions) 449.8 224.7 +100%Dividends (cents per share) 120.0 100.0 +20%Coal production2 (million tonnes) 28.6 29.1 (2%)Coal shipments2 (million tonnes) 29.0 28.7 +1%Lost time injury frequency rate3 1.75 3.80 54% 1 Comparative information has been reclassified to include sea freight receiptsand foreign exchange gains 2 Production and shipments are on a 100% basis. Shipments exclude purchasedcoal. Details of full production and shipments are shown in the Financial andOperating Statistics appendix. 3 Per million person hours Sales revenue Sales revenue of $1,442.0 million was 36 per cent higher than in 2004,reflecting higher prices for export thermal coal and semi-soft coal in 2005,which were partially offset by the stronger Australian dollar. Production Managed production of saleable coal was down by two per cent (0.5 milliontonnes) to 28.6 million tonnes, consistent with allocation through Port WaratahCoal Services and domestic contracts. Coal & Allied's share of saleable coalproduction was 21.4 million tonnes. Dividends A fully franked final dividend of $1.20 per ordinary share will be paid. Aninterim dividend of $1.10 was paid during 2005. A dividend of 1.75 cents perpreference share, fully franked, will be paid, making the total preferencedividend for the year 3.5 cents per share, fully franked. Cash flow Net operating cash was $449.8 million compared with $224.7 million in 2004. Thesignificant change in operating cash flow reflected the effect of higherearnings resulting from improved coal prices, partially offset by higheroperating costs. Debt Net debt was lower in Australian dollar terms at the end of 2005 at $69.2million. Gearing (net debt to net debt + equity) was 7.8 per cent at 31December 2005, compared with 27.1 per cent at 31 December 2004. Capital expenditure Total capital expenditure for the year was $65.1 million compared with $29.5million in 2004. Expenditure was predominantly for sustaining purposes and thepurchase of land surrounding the Mount Pleasant deposit. Capacity Balancing System The capacity balancing system at Port Waratah Coal Services continued to managethe vessel queues, with a total of 80.9 million tonnes loaded through the portin 2005, an increase of 4.1 per cent on 2004. Stakeholders in the Hunter Valleycoal chain collaborated throughout the year with the aim of maximising outputfrom existing infrastructure. In addition, a commitment to expand annual portcapacity to 102 million tonnes by late 2007 combined with continuedde-bottlenecking of the rail system, should create the opportunity to accessadditional capacity. Market conditions Commodity markets continued to surge throughout 2005, on the back of strongeconomic growth and increased energy demands. Despite spot prices for thermalcoal declining in late 2005, the volume of transactions was small and somerecovery is expected. The year was very positive for thermal coal producers anddemand fundamentals remain sound. Record prices for semi-soft coals wereachieved in the first half of 2005. Strong supply growth of thermal coal fromIndonesia was largely offset by a reduction in Chinese exports. Safety performance Significant progress was made in reducing the frequency of injury (1.75 LTIFRcompared with 3.80 in 2004) with all operations contributing to thisimprovement. A number of initiatives were identified and implemented at theoperations. Coal & Allied was again represented at the NSW Minerals Council OccupationalHealth and Safety Innovation Awards with Mount Thorley/Warkworth winning theState Award for the development of a grease system pressure checking andreducing device. Mount Thorley/ Warkworth's mines rescue team also won firstplace in the 2005 Hunter Valley Mines Rescue Competition. Sustainable development / Environment Coal & Allied's focus on sustainable development continued in 2005 through bothinternal and external engagement programs. Environmental achievement wasrecognised through Bengalla's receipt of the Banksia Environmental FoundationAwards for "Sustainable Development Leadership in the Minerals Industry." For further information, please contact: LONDON AUSTRALIA Media Relations Media Relations Maria Darby Walker Ian Head Office: +44 (0) 20 7753 2305 Office: +61 (0) 3 9283 3620 Mobile: +44 (0) 7725 036 544 Mobile: +61 (0) 408 360 101 Investor Relations Investor Relations Nigel Jones Dave Skinner Office: +44 (0) 20 7753 2401 Office: +61 (0) 3 9283 3628 Mobile: +44 (0) 7917 227 365 Mobile: +61 (0) 408 335 309 David Ovington Susie Creswell Office: +44 (0) 20 7753 2326 Office: +61 (0) 3 9283 3639 Mobile: +44 (0) 7920 010 978 Mobile: +61 (0) 418 933 792 Website: www.riotinto.com Coal & Allied Financial and Operating Statistics 2005 2004Production and shipments '000 tonnes '000 tonnes Total shipments 1 29,042 28,677 Total saleable production 2 Hunter Valley Operations 12,374 13,269 Mount Thorley Operations 3,962 3,547 Bengalla 5,965 5,312 Warkworth 6,293 6,955 Total 28,594 29,083 Coal & Allied equity share of production Hunter Valley Operations (100%) 12,374 13,269 Mount Thorley Operations (80%) 3,170 2,838 Bengalla (40%) 2,386 2,125 Warkworth (55.57%) 3,497 3,865 Total 21,427 22,097 Shipments by market 1 Japan 16,353 14,441 Asia (excluding Japan) 6,347 8,630 Europe 2,026 1,564 Other 241 796 Domestic 4,075 3,246 Total 29,042 28,677 Shipments by product 1 Export thermal 21,493 20,173 Domestic thermal 4,075 4,306 Coking 3,474 4,198 Total 29,042 28,677 Financial 2005 2004 $ million $ million Total assets 1,829 1,795 Capital expenditure and investments 65 30Depreciation and amortisation 105 117Employees 1,433 1,400Net debt to net debt + equity (%) 7.8 27.1Earnings per share (cents) 335.1 134.8 1 Shipments are on a 100% basis and exclude purchased coal2 Production is on a 100% basis This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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